Days before the new campaign tips off on October 20 (AEDT), the Rockets elected to waive Exum.
Before training camp began in September, the 26-year-old signed a three-year non-guaranteed deal with a base value of $10.9m and $10.8m in incentives.
Exum played in three Houston pre-season games but did not suit up for their final hit-out with the San Antonio Spurs and was officially waved by Houston on Sunday.
It's another blow for the talented but injury prone Exum, who earned another shot with Houston after he played a key role in the Boomers' historic Olympic bronze medal run in Tokyo.
Injuries have meant the fifth pick in the 2014 draft has never truly flourished across seven seasons in the NBA.
He was traded to Cleveland late in 2019 after six seasons in Utah, and then never suited up for the Rockets in the NBA when he was shifted there in January as part of the James Harden trade.